Social 2.0

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It's been over a year now that I've been studying the social CRM landscape, and lately I've noticed a number of blogs and articles suggesting a waning enthusiasm for social CRM and social media in general. To counterbalance the drumbeat from the pundits—myself included—who have touted it as a game changer, there's a buzz that suggests it may be more myth than reality. Or, at the very least, that it's time to dial back the exuberance and examine what social CRM really means for a company and how it can be executed.

Frankly, this doesn't surprise me. We're seeing social media follow a familiar pattern for technology trends. First it is introduced by the fringe and spreads like wildfire until it reaches critical mass (in this case, with stunning speed of adoption). Within a very short timeframe, businesses everywhere feel pressure to get on board. The 2011 IBM study on social CRM clearly illustrated this, with 70 percent of executives saying they risk being perceived as out of touch if they don't have a social media presence.

But presence does not connection make, and herein lies the rub. The companies that staked their virtual claim in the blogosphere now need to build something of value for the customers they hope to attract. Customers may explore a company's social community initially, but if their expectations aren't met, they aren't compelled to return. And so, predictably, we are seeing some social media burnout, with organizations questioning the validity and need for social CRM.

But, like the dot.com boom, bust, and resurrection, I suspect we will see a winnowing of businesses' uninspired social initiatives. What will emerge from the ashes will be innovative uses for social that may look very different from businesses' Facebook pages and tweets of today.

Which brings me to what I think is at the root of this discomfort with social CRM: It starts with the definition of CRM, and the old tension between CRM and CEM—customer experience management.

Many companies have assumed if they have a CRM strategy, they have a CEM strategy, but they are indeed very different things. I once had a client who said he had a customer experience strategy because he had multiple tiers of customer treatments for his service center based on the value the customer represented to the business. These scenarios, from cold transfers for low-value clients to warm hand-offs for high-value ones, defined the types of experiences customers would receive, and this, to his way of thinking, comprised a customer experience strategy.

Clearly, this was a business-oriented, inside-out approach for how a customer would be managed, not a strategy that looks at how customers perceive their relationship with the company with expectations for quality, service, and value. It was no shock that this company suffered from low customer satisfaction scores.

Putting aside the debate over nomenclature, ultimately, here is what companies need to do: develop a true CEM strategy as the first step. Understand what customers value and then consider how to deliver that in a social ecosystem that leverages the unique viral aspects of social media. Indeed, this surfacing discontent with social media will only generate an increased customer demand for real value, upping the ante for companies to ascertain how social platforms will fit within their overarching, multichannel customer relationship strategies. Innovative business leaders will seize this opportunity to differentiate themselves with determination rather than disillusionment.

There are technologies and practices on the market today that businesses can use to analyze social media data and integrate these findings with more traditional CRM approaches. But the move to social CRM is more philosophical than that. For many organizations, it may also mean a cultural shift needs to take place to truly transform a company into a "customer-focused enterprise." Many organizations claim to be customer-focused, but perhaps it will be social CRM that actually makes it a reality. Or, dare we suggest it starts with social CEM?

Carolyn Baird is the global director for IBM&'s 2011 CMO Study and the CRM global research lead with the Institute for Business Value (IBV), IBM's business think tank. Carolyn specializes in the development of multichannel, digital transformation strategies with a focus on communications, marketing, and branding. She can be reached at cbaird@us.ibm.com.

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